An Analysis of the Process of Capital Liberalization in Italy

Bodnar, Gordon M.; Bartolini, Leonardo

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An Analysis of the Process of Capital Liberalization in Italy

IMF Working Paper No. 92/27

38 Pages Posted: 15 Feb 2006

See all articles by Gordon M. Bodnar

Gordon M. Bodnar

Johns Hopkins University - Paul H. Nitze School of Advanced International Studies (SAIS)

Leonardo Bartolini

affiliation not provided to SSRN (deceased)

Date Written: April 1992

Abstract

Beginning in 1985 Italy embarked on a path of progressive removal of its system of controls on portfolio investment, a process formally completed with the abolition of all remaining restrictions in 1990. In this paper we review this policy of capital liberalization and integrate the analysis with an examination of the process of stabilization of the lira exchange rate in the 1980s. Various indicators of capital controls` effectiveness and target zone credibility are used to identify the temporal relations among capital liberalization, exchange rate stabilization and capital flows.

JEL Classification: F31, F36

Suggested Citation: Suggested Citation

Bodnar, Gordon M. and Bartolini (deceased), Leonardo, An Analysis of the Process of Capital Liberalization in Italy (April 1992). IMF Working Paper No. 92/27, Available at SSRN: https://ssrn.com/abstract=884686